Gilbert, an Australian who previously co-founded startups including one acquired by LivingSocial, helped launch Crypto in January.
Chris Ratcliffe

by
Tom Metcalf and Pierre Paulden

The cryptocurrency frenzy has minted another billionaire. For 45 minutes, at least.

James Gilbert, the president and largest shareholder of Malibu, California-based Crypto Co., held a $US1 billion stake Thursday after its stock surged as much as 83 per cent. The shares later retreated, paring the value of his holding to $US919 million as of 12.17pm in New York. Crypto's market value climbed to as much as $US3.04 billion, with just 5360 shares changing hands in over-the-counter trading out of 19.6 million outstanding.

Crypto was up 76.3 per cent at $US149.00 at 12.43pm in New York.

Gilbert's stake increased six-fold in the past week as bitcoin and other cryptocurrencies continued to skyrocket. He and the company didn't immediately respond to phone and email messages seeking comment.

Bitcoin's rally of more than $US3000 in the past 24 hours continues to defy its legions of sceptics, as mainstream demand for the world's largest cryptocurrency explodes. Investors flocking to open new accounts or place orders Thursday left Coinbase, the largest US exchange, warning of outages and slow transactions.

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Bitcoin listed at $US16,395 as of 1.15pm in Bloomberg pricing that is a composite of exchanges. That takes its rally this year past 1500 per cent and its market capitalisation is now at $US274 billion. On Thursday New York time it topped out at $US16,777.08 after starting the day at $US13,363.25. It peaked at $US15,995 on Bitstamp.

"This is irrational exuberance," Royal Bank of Scotland Chairman Howard John Davies said in an interview on Bloomberg TV overnight. "This is a very, very unusual market, that shows we're not in a normal two-way trading market."

Crypto is investing in and trading digital assets, and developing source code for managing them, according to its regulatory filings. Gilbert, an Australian who previously co-founded startups including one acquired by LivingSocial, helped launch Crypto in January.

The company had net assets of $US3.6 million as of September 30 and posted a $US1.5 million net loss in the third-quarter, according to a regulatory filing.

Gilbert isn't alone. A run-up in ether, the digital money of the Ethereum blockchain, helped one unidentified crypto-trader turn $US55 million into $US283 million in a little more than a month earlier this year, at least on paper. Cameron and Tyler Winklevoss, the twins who sued Mark Zuckerberg over the genesis of Facebook, said in 2013 that they had bought $US11 million worth of bitcoin. Earlier Thursday, that stake would have been worth about $US1.8 billion.